Pricing Nature to Save the Planet

New Scientist, covering Rio+20, talks about putting a price on the natural world:

Green economics, the theory goes, will work by quantifying nature and giving it a cash value. As Steiner put it: “Factoring natural capital into the bottom line will bring the real wealth of the planet from the invisible to the visible spectrum.” The hope is that, faced with the potential for monetary loss as a result of environmental degradation, decision-makers will feel compelled to act.

The notion of putting a price tag on nature is a powerful one. Economic self interest is a tremendous force. Given the importance of the planet to us, why isn’t it as easy to strike it rich in green tech as it is in internet tech?

If we want to unleash innovators on the task of preserving nature, we need those economic incentives. We need it to be as possible to get rich by improving the climate or solving ocean acidification or deforestation as it is to get rich creating the next Facebook.

This will, however, require action from governments. The natural behavior of markets is to treat commons as free resources to exploit, even when those commons have economic value for others. If we want markets to value them, we will need to impose a price on those resources, and only governments are empowered to do so.